The SPYs dropped again today. The market opened lower, rallied to the opening level and then retreated from those levels.
On the three day chart, notice
1.) We have a clear downtrend in place right now.
2.) Today's action could be a consolidation at the bottom of the sell-off
Notice that on the 5-day QQQQs, we have a nice triangle consolidation taking place.
On the daily SPYs, note the market has definitely backed-away from previous highs. In other words, the double top is looking more and more possible, although it is certainly not guaranteed right now. However, prices have dropped below the 10 and 20 day SMAs. If the market is going to maintain its upward momentum it will have to make a solid move back up over the next few days.
The daily QQQQs show the consolidation right before the SMAs.
Like the SPYs, the Russell 2000 has broken below the SMAs and prices are closing at uncomfortable levels. Traders are taking profits in this area and getting out of these more speculative shares.
